"You're wasting your money on a home inspection, and we're not going to fix anything."

That’s what a local builder told one of my customers.  The home buyer hired me to inspect her new single family home before she finalized the purchase, and the builder apparently didn’t want to end up dealing with any hassles.  The builder’s rep told the buyer that having a new construction home inspection was a waste of money, and that even if I came up with any issues, it wouldn’t matter; the house had already been inspected by city, so they wouldn’t fix anything.

The home buyer said she felt like cancelling the entire purchase after hearing that, and I can’t say I blame her.  Who would want to buy a home from someone with an attitude like that?

Maybe the rep felt like he was being personally insulted when the buyer mentioned a home inspection, so he was getting defensive.  If that was the case, I say grow up.  This is just business.  Having an attitude like that will only turn buyers off, and make the builder look silly when the home inspector comes up with a list of installation defects.

It’s not supposed to be the home inspector against the builder; we’re both working for the home buyer, trying to make sure that any construction defects are addressed right away, before they turn in to a expensive problem.

My advice to builders

When builders use the old excuse of “the city already approved it” they end up looking like weasels.  Everyone knows that municipal building inspectors can’t possibly catch every little defect; no one can.   When a municipal inspector approves a permit, it means they didn’t find any defects; it doesn’t mean they’re putting their blessing on something that was done wrong.  When a builder tries to talk a home buyer out of having a home inspection done, it’s a huge red flag for the home buyer and the home inspector.

Builders should welcome a home inspection.  If the home buyer is nervous about the quality of construction, this is a perfect opportunity for the buyer’s fears to be assuaged.  If the home is truly well built, a good home inspector will say so.  While there may be a handful of overly zealous, hyper-critical home inspectors, most of us aren’t.  Most home inspectors appreciate neat work and best practices, and we love pointing this stuff out to clients.

When I inspect particularly neat wiring, I make a point of telling the buyer that the electrician probably took a lot of pride in their work.  

When I inspect a new home with insulation applied to the exterior of the foundation, I explain how this is a more expensive way of insulating the basement, but it’s also a superior way of doing it.

When I see a drain pan installed below a washing machine on the second floor, I tell my clients about how this isn’t required, but it’s a nice safety measure that the builder added.

A home inspection is a PR opportunity for the builder.  If the home inspector comes up with a list of construction defects, the builder has a golden opportunity to fix the issues with a smile.  This creates trust and goodwill with the buyer, which can lead to referrals.

When a builder welcomes a home inspection, they’re telling the home buyer that they’re confident in their work.    This concept seems obvious to me, but only the best builders seem to understand this.

Back to my original story.  I didn’t find a ton of defects at the new construction house I mentioned at the beginning of this blog.  It was all stuff that could probably be corrected in one day – a kitchen cabinet drawer that wouldn’t open because it was in a terrible location, a back-pitched plumbing vent, improper flashing above windows… stuff like that.  The buyer asked to builder to repair everything on my report, and wouldn’t you know it?  The builder was happy to fix everything.  I’m sure everyone will live happily ever after.

Reuben Saltzman, Structure Tech Home Inspections - Email- Minnesota Home Inspections

        

Why municipal inspectors wear blinders

I’ve taken many building code classes that were taught by the Building Official for the City of New Hope, Roger Axel.  He’s a fantastic teacher.  In his classes, I remember him repeatedly telling us to take off the blinders; what he meant by this was to not miss the forest for the trees.  Sure, the deck ledgerboard has lag screws every six inches… but if the house was built with floor trusses, what are those lag screws going in to? The wall sheathing? Look at the big picture, keep an open mind, don’t make assumptions, question everything.

Despite this sage advice, municipal inspectors often have to wear blinders.  This blog post isn’t about deck construction.  This post is about why municipal inspectors have to wear blinders.

Here’s a common scenario: I inspect a home for a buyer, and I come up with a list of electrical defects that are potential fire hazards.  The buyer asks the seller to fix the stuff.  Two days later the seller calls me, and she’s not happy.

Seller: “Hello Mr. Saltzman, you told my buyer a lot of bad information about my electric service.  I just had the Minnesota State Electrical Inspector out at my house last year, and they said everything was fine.”

Me: “Why did you have the state inspector at your house?”

Seller:  ”I had my basement finished off, and they approved all the work.  They wouldn’t have signed off on it if there were problems!”

Ah, but that’s not true.  When a permit gets pulled for work being done at a property, the permit fee covers the cost of the inspections to make sure the work being done is correct.  Again, the work being done… not all the work that was ever done at the house.  A $50 electrical permit for some wiring in the basement doesn’t cover the inspection of the entire electric service at the house.  The electrical inspector is being paid to look at the work that’s being done, and that’s it.  If there is a glaring electrical defect that has nothing to do with the work being done, will the electrical inspector require repair?  It depends.

On one hand, the electrical inspector may not have the right to require repair.  If the municipal inspector is being hired to inspect the work that’s being done, they have an obligation to the homeowner to approve the work if it’s done properly, regardless of whatever else is going on at the house.  If an owner is replacing an electric panel, should the municipal inspector go through the entire house to make sure all the lights are wired properly, all the outlets grounded, and GFCI outlets installed to today’s current code?  Probably not.

On the other hand, does the inspector have a moral obligation to report the other defects they see?  Maybe, but these defects shouldn’t have any effect on the permit approval process.  If a municipal inspections department begins requiring repair of defects that aren’t directly related to the work being done, what are homeowners and contractors going to start doing?  They might decide that it’s too much of a hassle to pull permits, because some ‘a-hole inspector’ is going to start poking around for other problems as soon as he or she sets foot in the house.

Municipal inspectors need to have a delicate balance of what they look at and enforce; if they miss defects, they get labeled incompetent or lazy.  If they start requiring more repairs than what they’re hired to look at, people think they’re being jerks, and people stop pulling permits.  To a certain degree, municipal inspectors have to wear blinders.  I don’t envy the job of the municipal inspector.

If a municipal inspector signs off on a permit, they’re signing off on the work that’s being done; not the entire house.

Reuben Saltzman, Structure Tech Home Inspections - Email- New Hope Home Inspections

    

Why Are Home Inspectors So Inconsistent?

Have you ever wondered how different home inspectors can look at the same issue, yet have completely different ways of describing the situation and different calls to action?

I’ve realized that I’m not even consistent about my own recommendations.  I’ve given a lot of thought to why this is, and I think it comes down to two factors: cost effectiveness and risk management.  I think those two factors affect just about every recommendation that I make during my home inspections.

Cost Effectiveness

Sometimes I’ll identify an issue with a house and I’ll tell my client what the problem is, but I’ll say it doesn’t make much sense to fix it.  For example, insulation on a one-and-one-half story house.  These houses usually have very little insulation at the upper level, but it’s not cost effective to gut the entire upper level to re-insulate.  The amount of money you’ll spend gutting the upper level will far outweigh any potential savings in heating and cooling costs, so I usually say “This is what you’ve got.  Live with it.”

Risk Management

Anyone buying property assumes some risk.  We home inspectors help buyers by reporting issues, and making recommendations for repair based on how much risk is involved, along with the cost effectiveness of the repair. Think about any defect with a house, and think about what a home inspector would recommend; hopefully, it makes sense.  I’ll give a few examples of how I make recommendations:


A missing handrail at a stairway: This is a potential fall hazard with a very low repair cost, so I always recommend repair.


A missing cover plate at an outlet: This is a potential shock or electrocution hazard, and it has a very low repair cost, so I always recommend repair.


Missing house wrap behind vinyl siding: This has a moderate potential for moisture damage to the house, but the cost to fix missing house wrap would be huge, so I never recommend repair of this condition.  I do let my clients know that they are assuming some risk.


An improperly attached deck that’s one foot off the ground: This has a moderate potential for failure / collapse, but if it’s only a foot off the ground, there's a very low risk of injury.  The cost to fix this would probably be just as much as it would cost to repair the deck if it collapsed, so I don’t recommend repair of this condition. I do let my clients know that they are assuming some risk.


An improperly attached second story deck: Again, this has a moderate potential for failure / collapse, but people could be seriously hurt or killed by a second story deck collapse.  While the fix might be expensive, I recommend repair every time.

The next time you’re involved in a home inspection, whether you’re an inspector, a real estate agent, or a home buyer, think about cost effectiveness and risk management.  I've realized this is something I do subconsciously during every inspection... well, at least I used to.  Now I consciously do it.



Reuben Saltzman, Structure Tech Home Inspections - Email - Minneapolis Home Inspections



    

Does The Seller Need To Fix This?

This is a common question I’m asked when I find defects at houses that I inspect, and the answer is always no. When I find defects during a buyer’s inspection (and I always find defects), there are four ways for the buyer to deal with them: Do nothing, have the seller do repairs, have the seller fund repairs, or cancel the purchase of the home. I’m going to discuss these different options, and go over why some are better than others... in my opinion, of course.

Do Nothing. This is usually the best option for buyers. When buying a used home, buyers shouldn't expect everything to be perfect, because it never is. Walls get damaged, showers leak, appliances age. This doesn’t mean buyers shouldn’t address defects after they’ve bought the house, but it’s unrealistic to expect sellers of used houses to fix every little defect. Asking sellers to address a long list of minor repairs will often make the seller feel defensive about their home, make the buyers look petty, and make the home inspector get labeled ‘nit-picky’. Bad feelings all around :(. This typically comes from a misunderstanding of what a home inspection is for; home inspections are meant to allow the buyers to make an informed decision about their potential purchase, not to give sellers a long list of little repairs.

Ask The Sellers To Make Repairs. This is usually, but not always, the worst option. If a seller has done work at their home and it was done wrong, why would they get it right the second time? When a buyer asks a seller to repair things, they are basically making the seller the general contractor for their new home. I don’t think this makes any sense.  The seller has no motivation to do high quality work, and I know from experience that the work is usually done wrong, or the work will be sub-par and the materials will be the cheapest possible. It’s a very frustrating situation for buyers when I go out to verify repairs the day before closing and nothing is done right.  What happens now?   If the seller is going to do repairs, language should be included in the purchase agreement that requires licensed contractors to do the work, permits pulled and inspected by the authority having jurisdiction (the city), and proof of both should be given to the buyer well in advance of the closing date.  Just about anything related to plumbing, electrical, or HVAC requires a permit, and most work performed by carpenters also requires a permit.  This should be done for projects of any size; if a project is too small to require a permit, why have the seller do it at all?

Ask The Sellers To Fund Repairs. This is usually a much better option than having the seller do repairs.  The buyer can hire their own contractors to do the work, and they can oversee the whole project after they own the house.  This is definitely the most logical approach, but it doesn’t happen as much as it should because emotions get in the way.  Many home buyers have a mindset that they’re not getting a good deal if they buy a house and need to do repairs right away, no matter what the price is… and family members help perpetuate this idea, especially fathers (I'll probably do it too someday).

Cancel The Purchase. This happens when the buyer decides there are too many problems with the house and they don’t want to spend their time dealing with repairs, or when buyers and sellers can't come to an agreement.  In most instances when a deal falls apart because of an inspection, it happens because neither the buyers nor the sellers are aware of a major problem, and the buyers don’t want to spend their time and energy overseeing repairs.  This is a great reason to have a pre-listing inspection!
Sometimes issues come up during an inspection where the extent of the damage or the cause of the problem is not always apparent, and these are times when a buyer should definitely not wait until they own the home to undertake repairs, or have invasive / destructive inspections performed.

Reuben Saltzman, Structure Tech Home Inspections - Email - Minneapolis Home Inspections

Appraisals vs Home Inspections

When I tell people what I do for a living, a common response I get is “So you’re, like, an appraiser, right?"

No.  I’m not.

While home inspectors and appraisers both look at houses, must be independent, objective, and impartial, our jobs are quite different.

The primary purpose of a home inspection is to educate the buyer about their new home, so they can make an informed decision on the purchase.  The primary purpose of an appraisal is to protect the lender’s assets; this is done by determining the value of a home.  The value of a home will be highly dependant upon what other properties in the area are worth, and whether the subject home is in overall better or worse condition than the comparison homes (referred to as ‘comps’) .

A home inspector’s client is the buyer, whereas the appraiser’s client is the lender.  A home buyer is responsible for finding an excellent home inspector, who has only the client’s interests in mind.  The home inspector gets paid whether the home is sold or not.  As a side note, a home inspector should never allow their inspection fee to get rolled in to the closing costs; this means that the home inspector now has a financial interest in the home being sold to the buyer!  As for appraisals, the bank will typically decide who does the appraisal, and the buyer has very little to do with it.

Home inspections are almost always performed with the buyer.  Some home inspectors (such as myself) want the buyer to attend the entire inspection, while others ask the client to show up at the end.  For appraisals, it’s a little more mysterious.  The buyer doesn’t attend the appraisal, they may not be told when the appraisal will happen, and they aren’t given a copy of the appraisal – not to say they can’t get a copy, but remember, the lender is the client; not the buyer.

The bulk of the work for a home inspection is performed at the subject home, while an appraiser will spend a relatively small portion of their time at the property.  A home inspector spends several hours at a home doing the inspection, and must also generate a report, which may be produced on site, or might be produced later from their home or office (or even a restaurant…).  An appraiser’s work consists of much more research about all the other properties in the area, and the report must include detailed information about other comps.  On average, the on-site portion of an appraisal can be done within 30 minutes.

In short, a home inspector determines the condition of the home, whereas an appraiser develops an opinion of value for a home.

RELATED POST:  FHA Loans Require Appraisals, Not Inspections

Reuben Saltzman, Structure Tech Home Inspections – Email – Home Inspector in Saint Paul